Hometrack: London asking prices accelerated in December

Chris Papadopoullos was City A.M.'s economics reporter until February 2016.

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Chris Papadopoullos

House prices don't show any signs of slowing down (Source: Getty)

London asking prices have risen 13.8 per cent over the last 12 months, according to figures released this morning by property market analysts Hometrack.

The figures showed prices in the capital were the rising at the second-fastest rate in the country.

The UK-wide index, which covers homes in cities, showed a rise of 11.4 per cent in December from 10.2 per cent in November. It suggests house prices maintained their pace after official figures showed they accelerated in November.

“This represents the highest rate of growth for 15 months as demand increases in the face of constrained supply – not least from property investors who accounted for one in five of all buyers in 2015,” Hometrack said.

The weakest growth in London was in high-end markets such as Kensington and Chelsea and the City of Westminster. Hometrack said buyers had been put off by higher rates of stamp duty land tax and, until recently, a stronger pound.

Higher rates of stamp duty and other tax changes are due to hit landlords in April, which may bring some extra supply to the market over the short term.

“Much has been made of the impact of tax changes for buy to let investors with mortgaged property and the proposed new three per cent stamp duty levy from April 2016,” said Richard Donnell, insight director at Hometrack.

“Some investors may look to move before April, we expect others will need to sell to support de-leveraging of their portfolios in order to reduce tax liabilities. This will bring much needed new supply to the market, especially for smaller sized homes.”